• Submitted by: lena campos
• Business and Economy
• 01 / 03 / 2013

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Cuba's new tax regime became effective on January 1, 2013, following the enactment of the nation's new tax code.

The new tax code introduces a total of nineteen taxes including environmental levies, social security contributions, and a sales tax.

State-owned businesses, which account for almost nine-tenths of all enterprises, will be subject to a 35% tax rate on profits. The new law also introduces a 25% social security tax, but this will be gradually reduced over a five-year period until it reaches 5%. Businesses with five employees or less will be exempt from this tax.

Meanwhile, a number of tax concessions will be introduced to stimulate economic activity and development, particularly for the agriculture sector.

A progressive income tax regime has been in place since the 1990s for privately-owned businesses, the self-employed and farms, starting at a rate of 15% on annual income up to CUP10,000 (USD377), increasing to 50% on earnings above PES50,000.

Source: TaxNews.com